For Recent Grads, Good Jobs Really Are Hard to Find

Anecdotal accounts of young college grads working as baristas, bartenders or retail clerks are widespread, provoking questions about the economic logic of going to college, particularly if doing so means taking on a lot of debt.

Now come some economists from the Federal Reserve Bank of New York with evidence that college grads between 22 years old and 27 years really are finding it tougher to find jobs that require a bachelor’s degree than has been the case in the past.

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WSJ.COM

“Such difficulties are not a new phenomenon,” the economists say in an essay published in the New York Fed’s latest Current Issues. “Individuals just beginning their careers often need time to transition into the labor market.”

But that transition has been becoming more difficult for the past 15 years, they say. “Job prospects for recent college graduates have indeed worsened.”

Using Census Bureau and Labor Department data, the economists find that the fraction of college grads between 22 and 27 who were working in jobs that don’t generally require a bachelor’s degree rose to 46% during the 1990-91 recession, fell significantly during the 1990s boom and was down to 34% by 2001. This “underemployment rate” rose sharply after the 2001 recession and rose further after the 2007-09 recession, the economists find. It stood at 44% in 2012.

Underemployment is most acute for those immediately out of college: 56% of 22-year-old college grads in 2009-2011 were working in jobs that didn’t require college degrees, substantially higher than in 1990 and in 2001. Historical data suggest many of them will find better jobs before they turn 30.

Researchers Jaison Abel, Richard Deitz and Yaqin Su emphasize that their findings don’t undercut the economic wisdom of going to college: “While it appears that the labor market has become more challenging for recent college graduates, it is much worse for young people who don’t have a college degree.”READ MORE

David Wessel is a contributing correspondent to The Wall Street Journal and director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution. He can be reached at dwessel@brookings.edu

JERRY SEIB: THE POLITICAL FUTURE OF CHRIS CHRISTIE

On the heels of the ‘Bridgegate’ scandal, New Jersey Gov. Chris Christie gave a keenly anticipated State of the State address Tuesday. Washington Bureau Chief Jerry Seib analyzes how the governor did and whether he might be able to put the scandal behind him. Video: http://on.wsj.com/1drvA0Q

STORIES YOU SHOULDN’T MISS

From Washington in today’s Wall Street Journal: A federal court delivers a blow to net neutrality, the White House agenda meets resistance from Democratic lawmakers, and the Senate balks at extending jobless benefits. Also in the news: Lawmakers debate changes to the NSA, and the Supreme Court sets limits for lawsuits against corporations.

The next time you watch five seasons of ”Breaking Bad” in one week, you just might pay for it. A U.S. appeals court Tuesday rejected federal rules requiring broadband providers to treat all Internet traffic equally, a practice termed “net neutrality.” That means broadband providers can charge heavy-content sites like Google and Netflix, which accounts for 32% of peak Internet traffic in North America, higher fees to deliver Internet faster. Since it is likely that some of that burden will be transferred to consumers, Netflix purveyors could see their rates go up or, even worse, be billed based on usage. Critics have also pointed to the ethical dilemma of allowing broadband providers to determine what content is readily available on the Internet. The message here? Get your Netflix fix now, before it’s too late. Gautham Nagesh and Brent Kendall report.

White House officials crafting the President Barack Obama‘s State of the Union address clashed with congressional Democrats on the issue of free trade in meetings last week, as top administration aides urged lawmakers to pass “fast track” legislation that would make it easier for Mr. Obama to win approval for trade agreements. Some Democrats said they are wary of giving the White House a blank check, putting the administration in something of a pickle, as the legislation is key to completing a trade pact with 11 countries around the Pacific Ocean that would set rules for almost 40% of the global economy. Carol E. Lee and Peter Nicholas foreshadow what to expect from the address.

In a largely party-line 55-45 vote, efforts to reach a deal extending emergency jobless benefits for the long-term unemployed collapsed in the Senate. Those benefits expired Dec. 28, causing roughly 1.4 million people to lose aid. The Senate is unlikely to return to the issue until late January and shifts its focus today to the budget bill. Going into 2014, Democrats had vowed to make restoring the benefits their priority, while GOP lawmakers have said they will restore benefits only if their cost is offset elsewhere in the budget and paired with a job-creation measure. Kristina Peterson reports.

In another sign of discord, lawmakers split on whether to overhaul the National Security Agency’s surveillance practices interrogated a presidential review panel that has called for a variety of changes. The session raises the stakes for the president as he prepares a Friday speech where he will accept or reject the panel’s recommendations. Among those is the restructuring of the phone-data program such that phone companies or a third party would hold the records, and the NSA would need to submit a court order for each data search. Senators opposed to the overhaul sought to undermine the review group, calling it a “pro-civil-libertarian panel.” Siobhan Gorman explains the panel’s proposals.

If your car malfunctions while you’re powering down Germany’s Autobahn, you can sue the auto company—just don’t come running to U.S. courts. The Supreme Court made it harder to sue foreign corporations in U.S. courts over events that happened abroad, rejecting a lawsuit alleging human-rights violations in Argentina by German auto maker Daimler. Their ruling is the latest in a series of high-court decisions limiting liability in U.S. courts for offenses occurring outside the country. Jess Bravin and Brent Kendall report.

Recommended reading from around the Web:

A referendum on a new constitution in Egypt, where voting concludes Wednesday, is designed to provide “a stamp of approval for the coup that unseated former President Mohamed Morsi last July” and serve as a “prelude to a presidential bid by General Abdel Fattah al-Sisi, Egypt’s popular but divisive army chief, in elections due to follow later this year,” writes Alastari Beach. [The Independent]

Thomas Joscelyn writes that recent events are helping to underscore the real goal of al Qaeda, which is “power for its leaders and their ideology in the heart of the Islamic world. Al Qaeda’s jihadists are not just terrorists; they are political revolutionaries. They have sought, since al Qaeda’s founding in 1988, to overturn the existing political order in various Muslim-ruled countries.” [Weekly Standard]

The Senate bill in support of additional sanctions on Iran won’t achieve denuclearization, writes Jeffrey Goldberg, but it could move the U.S. closer to war with Iran and make Iran look like the victim. The only way to build international support for destroying Iran’s nuclear facilities is to exhaust all other options first, he writes. [Bloomberg View]

Karen Tumulty and Robert Costa write that one issue hanging over the inquiry into the New Jersey bridge scandal is a lingering question over the real motivation of the aides who caused the mess: “The explanation — that it was a move to punish a Democratic mayor who had refused to endorse Gov. Chris Christie‘s re-election bid — is being met with skepticism, both in the halls of the state capitol in Trenton and in Fort Lee, where the tie-up occurred for several days in September,” and there is speculation the target may have been an uncooperative state senator instead. [Washington Post]

As new domestic energy production recalibrates U.S. infrastructure needs quickly, investments in national-level improvements are needed to prevent price distortion and environmental disasters caused because old infrastructure that can’t keep up with the new economy, writes Adia Tomer. [Brookings]

Backers of the Affordable Care act are turning to celebrity power in its attempt to convince young people to sign up for health insurance. State and national groups pushing enrollment plan a live, six-hour online variety show on Thursday, and Jennifer Hudson, Olivia Wilde and Elizabeth Banks are schedule to appear in videos during the event. [Huffington Post]

Ruth Marcus on two big stories: The bridge scandal involving Gov. Chris Christie’s staff illustrates the perils of loyalty in excess, whereby staffers must have thought their job was to serve their boss above all. Former Defense Secretary Robert Gates‘s decision to release a “show and tell” memoir shows the consequences of the absence of loyalty. [Washington Post]

About Washington Wire

Washington Wire is one of the oldest standing features in American journalism. Since the Wire launched on Sept. 20, 1940, the Journal has offered readers an informal look at the capital. Now online, the Wire provides a succession of glimpses at what’s happening behind hot stories and warnings of what to watch for in the days ahead. The Wire is led by Reid J. Epstein, with contributions from the rest of the bureau. Washington Wire now also includes Think Tank, our home for outside analysis from policy and political thinkers.